Critical Review: RealReal (REAL) vs. Its Competitors

RealReal (NASDAQ:REAL) is one of 142 publicly-traded companies in the “Broadline Retail” industry, but how does it weigh in compared to its rivals? We will compare RealReal to similar businesses based on the strength of its earnings, institutional ownership, analyst recommendations, risk, profitability, dividends and valuation.

Institutional & Insider Ownership

64.7% of RealReal shares are held by institutional investors. Comparatively, 44.6% of shares of all “Broadline Retail” companies are held by institutional investors. 2.7% of RealReal shares are held by company insiders. Comparatively, 23.6% of shares of all “Broadline Retail” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares RealReal and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
RealReal	$692.84 million	-$41.80 million	-17.85
RealReal Competitors	$54.94 billion	$1.71 billion	14.99

RealReal’s rivals have higher revenue and earnings than RealReal. RealReal is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares RealReal and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RealReal	-1.42%	N/A	-5.09%
RealReal Competitors	-3.00%	-38.45%	-2.59%

Analyst Ratings

This is a summary of recent ratings and target prices for RealReal and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RealReal	1	2	6	0	2.56
RealReal Competitors	1404	5406	10879	309	2.56

RealReal currently has a consensus target price of $17.50, suggesting a potential upside of 46.32%. As a group, “Broadline Retail” companies have a potential upside of 20.80%. Given RealReal’s higher possible upside, equities research analysts clearly believe RealReal is more favorable than its rivals.

Volatility and Risk

RealReal has a beta of 2.85, suggesting that its stock price is 185% more volatile than the S&P 500. Comparatively, RealReal’s rivals have a beta of 1.75, suggesting that their average stock price is 75% more volatile than the S&P 500.

Summary

RealReal rivals beat RealReal on 7 of the 13 factors compared.

About RealReal

The RealReal, Inc. operates an online marketplace for resale luxury goods in the United State. The company offers various product categories, including women's fashion, men's fashion, jewelry, and watches. It primarily sells products through online marketplace and retail stores. The company was incorporated in 2011 and is headquartered in San Francisco, California.